I send a semi-daily email delivering insights into leadership in exponential times. For entrepreneurs, corporate irritants and change makers. Raw, unfiltered and opinionated. It is called The Heretic and here is the dispatch from 2017-02-23:

Sign up below ↓

THE FINE LINE BETWEEN TALKING YOURSELF INTO SOMETHING AND REAL OPPORTUNITY

One of the finer points of starting a business is managing the fine line which exists between a real market opportunity (which translates into the simple formula of “enough customers who are willing to pay to make it work for you” or “customers x revenue per customer > cost”) and you talking yourself into it.

It’s a tough and fine line to walk — as on one hand you often don’t know what you don’t know, markets develop and grow (particularly when you are early in the market), your offering grows from MVP to feature-laden product (and thus better value proposition). And on the other hand markets might be niche and stay niche, you looked at a larger market when in reality you are serving a much smaller segment of this market, or the pain point you address is not a big enough one for your customers to switch or pay up.

It requires some weird judo skill to be able to cheer yourself on, convince yourself and everyone around you that the opportunity is huge and that now is the time — while also being able to step back from it all and do cold, analytical analysis and truly understand your market and its potential for you, your product and your company.

I recommend doing this early in the process, when you don’t have invested all that much time and effort and don’t face the sunken-cost fallacy. And then keep coming back to it every once in a while to check in on your assumptions. The easiest way I found doing this is to dedicate a day on the weekend where you (and ideally your cofounders) do nothing but poke holes into your business and plans. Shred it to pieces, play devil’s advocate, be brutally honest. Doing so will help you see your business with fresh eyes and gain perspective (and in the process also anticipate the questions an investor will have).